Investments, in general, come with varying levels of risk and reward. With the advent of cryptocurrencies, like bitcoin, investors are increasingly interested in reaping the benefits of this opportunity. And rightly so. Similarly to stock market trading, cryptocurrency investments are volatile because they’re impacted by investor trends and offer quite a bit of reward potential for a decent amount of risk. So the first thing to know about making an investment is how much you can afford to invest, and in which cryptocurrencies you might want to invest.
The biggest risk is that if one invested $100 (for example) into a cryptocurrency that ultimately failed, that $100 investment wouldn’t be recouped through sales — the cryptocurrency’s value is directly tied to interest. Again, much like the stock market.
It’s never a bad idea to consider diversifying investments, and cryptocurrency investors are known for buying and trading just as investors do in the stock market. I think it’s common to recommend looking at the overall performance of certain cryptocurrencies, as well as their predicted longevity. It may also be worth considering the purpose of the cryptocurrency in question – some focus on funding for specific technologies, while others on things like social advocacy.
As to whether it’s a good idea to make cryptocurrency investments while still paying student loans, I’ve heard arguments on either side. Student loans accrue interest, so borrowers continue to owe more than what they initially borrowed – at least until the loan has been paid off. Some say it’s best to get loans paid off before investing in other things. Others argue that just as we put money into retirement savings accounts while we work on paying down debts, cryptocurrency investments could provide similar benefits. So whether or not someone chose to invest while paying loans would ultimately be determined by whether or not the investor in question had the funds to invest in the first place.